Toshiba plans to bid for French nuclear group Areva's power distribution and transmission equipment unit, four sources with direct knowledge of the situation said, in a deal that could cost it more than $5 billion.
Toshiba, which runs a far-flung electronics conglomerate, is focusing on its power generation equipment business, including nuclear power for growth, as it reins in investment in its chip operations.
Toshiba shares fell 2.3 per cent after news broke of the planned bid. French engineering groups Alstom and Schneider Electric are planning a joint bid, while Axa Private Equity is looking at whether to make an offer.
The sources, who declined to be identified as the bid has not yet been made public, said Toshiba planned to participate in the first round of bidding on September 18th.
One source said that the deal could be worth more than 500 billion yen ($5.4 billion) while another said the unit could fetch as much as 700 billion yen.
Toshiba President Norio Sasaki, who took the helm in June and had led the firm's $5 billion acquisition of U.S. nuclear power firm Westinghouse in 2006, has said that profit from its power and infrastructure business will be double the level of profit from its devices in three years.
French Economy Minister Christine Lagarde said this week she hoped that Areva, a state-controlled nuclear reactor maker, would reach a decision on the possible sale by the end of 2009.
Officials of Toshiba were not immediately available for comment on the potential bid, for the unit, which is third in its field after ABB and Siemens. A spokesman for Areva declined to comment.
Toshiba shares fell 2.3 per cent to 466 yen, underperforming a 0.2 per cent fall in the benchmark Nikkei average.
Reuters